How businesses are leading the push for truck efficiency
Walmart, FedEx and Pepsi are rolling out fleet improvements while equipment makers Wabash National, Cummins, Eaton are also leading the charge.
Freight transportation is the connective tissue that holds the global economy together, ensuring that the products consumers want get on the shelves where and when they want them. It is also a ripe sector for significant improvements in efficiency.
With 70 percent of U.S. goods being moved by truck, freight is a key source of U.S. fuel consumption and greenhouse gas emissions, both of which are expected to increase as the demand for goods shipped by truck continues to rise. Fuel is a top operating cost for trucking, and a highly variable one that can increase dramatically in short timeframes.
Having big trucks use less fuel would reduce the carbon footprint of product distribution and save billions of dollars, and a recent proposal by the U.S. Environmental Protection Agency and National Highway Transportation Safety Administration for new heavy truck fuel efficiency and greenhouse gas standards — aims to do just this.
Meanwhile, California Gov. Jerry Brown last week ordered the state to develop a plan by next year for the freight industry to move to zero emissions. He called for "corridor-level freight pilot projects within the State's primary trade corridors that integrate advanced technologies, alternative fuels, freight and fuel infrastructure, and local economic development opportunities."
A diverse array of companies stand to benefit from strong heavy truck standards. Truck manufacturers will have a clear market for cost-and-fuel saving products: We saw the first signs of this in 2014, when the first generation of more efficient trucks under standards passed in 2011 drove truck manufacturers’ best sales year in a decade.
Trucking fleets will have access to higher-quality trucks with lower lifecycle costs. Brands, retailers and other shippers will be able to get products to market with more cost certainty and a smaller environmental footprint.
Strong, protective standards will complement and accelerate the efforts manufacturers, fleets and brands are already taking to improve products and operations.
"We have the technology"… today
Leading truck and equipment manufacturers have been investing research and development resources to bring to market fuel savings solutions. For example:
Wabash National, the largest manufacturer of box trailers, unveiled two new trailer aerodynamic add-ons with the potential to improve fuel economy by 9 percent;
Cummins, the largest manufacturer of heavy-duty diesel engines, has a range of near-market solutions that can improve fuel efficiency by “at least 10 percent.” The company also continues to invest in developing a waste-heat recovery system that is capable of delivering even more fuel savings; and
Eaton, a leading producer of powertrains, is able to deliver a 3-to-6 percent improvement in fuel efficiency today, through system optimization. The advanced transmissions designs Eaton is introducing to the market are capable of delivering up to another 8 percent in savings.
While these leading truck manufacturers have taken the first step by developing the technologies, strong standards will accelerate their adoption.
Standards will boost the efforts of forward-thinking companies
Leading fleets are pushing efficiency efforts in their own operations, but even large companies lack the market scale to pull less-polluting trucks into the market without strong standards:
Walmart, the fourth largest private fleet, has been at the forefront of pushing progress. The organization has increased operational efficiency by over 80 percent and developed a concept truck. Yet in its most recent Global Responsibility report, Walmart outlined a series of challenges to further improvements in truck efficiency, including aligning supply and demand. The report highlighted policy advancements, including truck fuel efficiency standards, as presenting “key opportunities to improve efficiency across the industry in a coordinated, responsible and safe way.”
FedEx, the second largest for-hire fleet, was an early leader in the call for heavy truck fuel efficiency and greenhouse gas standards. It also set a goal of improving fuel efficiency by 30 percent (compared to 2005) by 2020. The company has nearly achieved its goal already, thanks to its “Reduce, Replace and Revolutionize” strategy. FedEx recognizes that we have “the opportunity to obtain even more fuel efficiencies and lower greenhouse gas emissions from vehicles” and is advocating public policy advancements, including a strong phase two program to seize the opportunity.
Pepsi, owner of the nation’s largest private fleets, has reduced fuel use by 24 percent since 2010 through strategic deployment of more efficient vehicles and use of alternative fuels and advanced technology. It recognizes that efficiency standards enable more progress. In a recent op-ed in the Wall Street Journal, PepsiCo Chairman Indra Nooyi proclaimed “strong new truck fuel-economy standards will keep America moving in the right direction."
Many leading companies, including HP, Procter & Gamble, Target and Hershey’s, are accounting for emissions from trucks as part of their scope 3 footprint. Increasingly, companies are setting specific sustainability performance targets for product distribution:
General Mills has a goal to reduce fuel use for its outbound moves by 35 percent compared to its 2005 consumption;
Anheuser-Busch set a goal in 2014 to reduce greenhouse gases from its global logistics operations by 15 percent per hectoliter sold; and
Unilever has committed to lower CO2 emissions from global logistics at or below 2010 levels by 2020.
Goals like these are certain to increase in the coming years. As they do, companies will find greater levels of reductions achievable and cost-effective because of heavy truck fuel efficiency standards.
Strong heavy truck fuel efficiency and greenhouse gas standards are the single most important opportunity the business community has to reduce the impact of product distribution while also delivering significant benefits to the bottom line.
Cut costs and help meet your company’s sustainability targets
The proposed standards are a step in the right direction, but delay the most critical protections until 2027 and leave cost-effective reductions on the table. EDF and other leading advocacy organizations are calling on the agencies to set new fuel efficiency and greenhouse gas standards for heavy trucks that cut fuel consumption by 40 percent in 2025 compared to 2010. Such standards would reduce per-mile freight costs by 21 cents a mile and save product manufacturers anywhere from tens of thousands to millions of dollars annually.
Now is a critical time to weigh in on the need for standards that will deploy the full range of currently available, cost-effective solutions and drive research and development into the next generation of solutions. The decisions made now will impact truck efficiency for the next fifteen years. The EPA and NHTSA have an open comment period through September 11, 2015.
Environmental Defense Fund and Ceres on Tuesday, July 21 will host a webinar to review the proposed standards and learn how your company can join the growing list of corporate leaders calling for strong standards.